Rail services: Commission legal action against 13 Member States for failing to fully implement first railway package

The European Commission has today decided to refer 13 Member States to the EU's Court of Justice for failing to correctly implement various parts of the basic EU legislation on opening the EU's rail market to competition, known as the "first railway package" (Directives 91/440/EEC, as amended, and 2001/14/EC). Important issues remain to be solved for opening up the railway markets to competition in Austria, the Czech Republic, Germany, Greece, France, Hungary, Ireland, Italy, Luxembourg, Poland, Portugal, Slovenia and Spain. Member States were required to implement these directives by 15 March 2003. Failure to implement these measures to open the rail market deprives rail operators of opportunities to offer services in other Member States and deprives rail customers of a greater choice of competitive rail services.

The EU rules

The main objective of the directives of the first railway package is to create a basis for market opening and competition in rail services. The provisions of the first railway package aim in particular at ensuring the independence of the infrastructure manager from railway undertakings, non-discriminatory track access charging and the setting up of a regulator to address obstacles to competition in access to rail infrastructure.

The problems

After detailed enquiries about implementation in every Member State, the Commission opened infringement proceedings in June 2008 against 24 Member States. Following modifications introduced in their domestic legislation by several Member States in order to comply with EU legislation on a number of issues, the Commission sent reasoned opinions to 21 Member States in October 2009 on the remaining infringements. After having analysed the replies of the Member States to the reasoned opinions, the Commission has decided to refer 13 Member States, which still do not implement EU rules properly, to the Court of Justice. Concerning the other Member States against which the Commission had sent reasoned opinions, clarifications are still ongoing with a view to determining whether a referral to the court is necessary.

The Member States referred to the court infringe the relevant EU legislation in different ways, in the Commission's opinion, most often by not sufficiently ensuring the independence of the rail infrastructure manager, through inadequate implementation of the provisions concerning rail access charging and/or due to a failure to set up an independent regulatory body.

Practical effect of incorrect implementation

Incorrect implementation of the first railway package directives results in obstacles to market access and a lack of transparency of access conditions. This prevents the establishment of a fully functioning single market for rail services in Europe. Unfair conditions of competition in access to infrastructure can arise from a situation where the infrastructure manager, responsible for setting access charges and allocating network capacity, is not sufficiently independent from entities running railway services themselves. The EU rules on track access charges have the purpose of encouraging optimal use of the rail infrastructure. Incorrect implementation may lead to access charges which are too high and therefore exclude potential operators who would have been able to bear charges set at the direct costs resulting from the operation of a particular service (the minimum charge required under EU legislation). It may also lead to unjustified discrimination between railways operating in different market segments.

Strong and independent railway regulators which have the power to take effective decisions on market access and charging issues are also essential for the establishment of fair and non-discriminatory market conditions.